Amortization Calculator
Generate a complete amortization schedule for any loan. See payment-by-payment breakdown of principal, interest, and remaining balance.
About this Calculator
Generate a complete amortization schedule for any loan. See payment-by-payment breakdown of principal, interest, and remaining balance.
Formula & Calculations
Formula
M = P [ r(1+r)^n ] / [ (1+r)^n - 1 ]Where:
- M=Monthly payment amount
- P=Principal loan amount
- r=Monthly interest rate (annual rate / 12)
- n=Total number of monthly payments
Assumptions
- Assumes fixed interest rate for the entire loan term.
- Each payment is applied to interest first, then principal.
- No additional payments, prepayments, or fees are considered.
Calculation Examples
Example 1
A 30-year $200,000 mortgage at 6% costs $1,199.10 monthly, with over $231,000 in total interest — more than the original loan amount.
Example 2
A 5-year personal loan of $30,000 at 8% has 60 payments of $608.29 each. Early payments are mostly interest; later payments are mostly principal.
Example 3
Higher interest rates dramatically increase total cost even on shorter term loans.
Frequently Asked Questions
What is amortization?
Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment covers both interest and principal, with the portion going toward principal increasing over time while the interest portion decreases.
How can I pay off my loan faster?
Make extra principal payments whenever possible, switch to bi-weekly payments (resulting in one extra full payment per year), or consider refinancing to a shorter term at a lower interest rate. Always confirm there are no prepayment penalties first.